Oando Plc has secured a $800 million loan agreement with African Export-Import Bank (Afreximbank) to facilitate the indigenous energy group’s acquisition of the entire share capital of Nigerian Agip Oil Company (NAOC).
The loan agreement was signed yesterday at the on-going Intra-African Trade Fair (IATF2023) in Cairo, Egypt.
Oando had in September 2023 announced that it had reached an agreement with Eni, an Italian multinational energy company with operations in 62 countries, including Nigeria, for the acquisition of 100 per cent of the shares of NAOC.
The $800 million loan deal between Oando and Afreximbank was hailed as a significant step in fostering Africa’s growth aspirations, with Oando trailblazing efforts in diversified and sustainable energy.
Afreximbank has signed deals woth $2 billion since the beginning of IATF2023, in a bold move aimed at fostering growth and strengthening partnerships across borders for Africa’s growth ambitions.
Upon completion of the assets acquisition transaction, subject to Ministerial Consent and other required regulatory approvals, the transaction would increase Oando’s current participating interests in OMLs 60, 61, 62, and 63 from 20 per cent to 40 per cent.
The Nigerian National Petroleum Company Limited (NNPCL) has said it had not raised any objection to the sale of NAOC’s shares to Oando.
Oando had outlined that the transaction would increase its ownership stake in all NEPL/NAOC/OOL Joint Venture (JV) assets and infrastructure which include 40 discovered oil and gas fields, of which 24 are currently producing and approximately 40 identified prospects and leads.
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The JV assets and infrastructure also include 12 production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the Kwale-Okpai phases 1 & 2 power plants-with a total nameplate capacity of 960MW, and associated infrastructure.
Based on 2021 reserves estimates, Oando’s total reserves stand at 503.3MMboe and the transaction is expected to deliver a 98 per cent increase.
The transaction will also grow Oando’s exploration asset portfolio through the acquisition of a 90 per cent interest in OPL 282 and 48 per cent interest in OPL 135.
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However, NAOC’s participating interest in SPDC JV-Shell Production Development Company Joint venture – operator Shell 30 per cent, TotalEnergies 10 per cent, NAOC 5.0 per cent, NNPC 55 per cent, is not included in the perimeter of the transaction and will be retained in Eni’s portfolio.
Group Chief Executive, Oando Plc, Wale Tinubu, said the synergies created by the acquisition would unlock unparalleled opportunities for the group to re-align expectations, enhance efficiency, optimize resource allocation, and significantly increase production.
According to him, the acquisition is in alignment with Oando’s strategy of acquiring, enhancing, appraising, and efficiently developing reserves.
He said the acquisition deal was not just an important milestone for the future of Oando; it brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector.
“Having achieved this significant milestone, we look forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for our local communities, stakeholders and shareholders,” Tinubu said.v
SOURCE: newmail-ng.com